I know there is the "expose the hand to prevent collusion" rule, but I've never seen anyone invoke it. Abuse of the rule like this is simply unconscionable.

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40-80. Commerce.

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Would other rooms expose the loser's hand in this situation (i.e. where no collusion could have taken place)? Absent other factors (the game being ridiculously good) I would avoid playing there if this is how they run their room. This jerk is taking advantage of the rules and the dealer is letting him.